Moderate activity witnessed in secondary bond market prior to weekly bill auction

By Wealth Trust Securities

Activity in the secondary bond market remained moderate yesterday, ahead of today’s weekly Treasury bill auction. 

The liquid maturity of 15.12.2021 was seen changing hands within the range of 12.98% to 13.00% during the morning hours of trading against its previous day’s closing levels of 12.90/05. Buying interest primarily from foreign market participants towards the latter part of the day saw the 2019 maturities (i.e. 15.01.19 and 15.09.19) trading within the range of 12.11% to 12.20%.

 At today’s weekly Treasury bill auction, a total amount of Rs. 24 billion will be on offer consisting of Rs. 8.00 billion each of the 91 day, 182 day and 364 day maturities. At last week’s auction, the weighted averages of the 91 day bill increased by ten basis points to 9.32%, the 182 day increased by seven basis points to 10.19% and the 364 day bill by three basis points to 10.58%.

 In the meantime, inflation for February was seen increasing further to 6.8% on the point to point while its annual average increased to a high of 4.6%.

In money markets, the OMO Department of the Central Bank of Sri Lanka infused an amount of Rs. 35.00 billion at a weighted average of 8.47% by way of an overnight reverse repo auction as the net deficit in the system stood at Rs. 37.41 billion. The overnight call money and repo averaged 8.49% and 8.74% respectively.

Rupee appreciates for third consecutive day

 In Forex markets, USD/LKR rate on active two week and one month forward contracts appreciated for a third consecutive day to close the day at levels of Rs. 151.70/90 and Rs. 152.25/60 respectively against its previous day’s closing levels of Rs. 152.00/15 and Rs. 152.55/70 on the back of exporter dollar sales.

 The total USD/LKR traded volume for 27 February 2017 was $ 91.64 million.

 Some of the forward USD/LKR rates that prevailed in the market were three months - 154.40/65 and six months - 157.15/40.